Research Outlook 2007 Economy Stocks International Bonds Market Studies Research team Download Economic Outlook Summary Booklet

International

POSITIVES

Global economy continues to grow

U.S. housing problems won’t significantly impact foreign markets

Lower oil prices help global economy

China becoming a major international force
 

NEGATIVES

Dollar weakening hurts European and Asian exporters

Interest rates rising in Europe and Asia

Global inflation concerns rising

Immigration and aging problems plague Europe’s big economies

While the global economy is slowing, it will still grow at a healthy rate and the U.S. dollar will fall. China, a major driver of the global economy, is now a force in the oil, metals and agriculture markets. Economies trading with China will do well; those that compete face difficulties. Winners include South Africa, Chile and other commodity exporting countries.  Losers may include Brazil and Mexico as they realize all the previous year’s election promises just can’t be kept.  

India and Japan should also grow in 2007.  India’s retreat from economic reform due to shifting politics will slow growth, but consumer clout will have a positive impact. Japan’s new government will fight for additional economic reform, but will find this difficult to achieve. The yen should rise versus the U.S. dollar, benefiting American investors.

Sweden’s new center right government should bring very positive changes to that economy, and Ireland’s excellent schools and strong productivity growth make these two countries attractive in 2007.